Unfortunately, your debt won’t die when you do. Your estate will need to pay any money you owe to creditors before your family members get an inheritance. If your assets can’t take care of your debts, your spouse or your children could have to pay some of those bills. Here are some ways to protect your family now and keep them from getting into financial trouble after your death.

1. Pay Off Your Debts Now

Avoiding debt is the best way to protect your family, but it’s not always possible. Many people have mortgages, car loans, credit card balances, and other types of debt. You should make your payments on time and consider refinancing for lower interest rates. When possible, pay off your loans early to keep interest from accumulating and make sure your family won’t have to worry about them.

2. Create an Estate Plan

No one wants to think about their own death, but an estate plan is essential for making sure that your money and possessions go to your loved ones. If you don’t have a will that names an executor for your estate, the government will take over and decide who gets what. Their conclusions could be very different from your desires, and any court costs or other fees they incur will come from your estate before your relatives get anything.

You should speak to your family members and find someone willing to act as your executor. Business owners will also need to decide if they want to name a new person to run their business or let the estate sell it after they die. If you want your business to continue, make sure you choose someone who knows your industry and can handle the additional responsibility. Then, speak to an attorney to create an estate plan that will fulfill your wishes.  

3. Talk to Your Heirs About What Will Happen After You Die

In most cases, your heirs won’t need to pay debts that your estate can’t cover. However, anyone who cosigns a loan will be responsible for it even after you pass away. In some states, your spouse could be liable for some debts as well. If you have a secured loan like a mortgage or a car loan, the lender will require your heirs to keep making payments, sell the asset, or give it up to the bank.

Make sure your family knows that they could have to keep paying some of your debts. However, family members should never have to pay off unsecured debts like credit card balances or medical bills if the estate can’t take care of it. Let people know that they should refer any collections calls for these types of debts to the executor of your estate.

4. Get Life Insurance

Life insurance can help your family stay financially secure after your death. It lets beneficiaries pay off your debts, and it can cover your funeral expenses and support your family by replacing your income. Many insurance policies will let you add coverage easily when you buy a house, get married, or have a child.

Term life insurance covers you for a specific amount of time, and you can use it while you’re paying your debts. When the term ends, you can decide whether you want to switch to a permanent policy that will protect your family no matter when you die. With life insurance from USAA, you can even choose a plan that won’t require you to keep paying premiums if you become disabled. The cash value of your life insurance will grow over time, and every permanent policy from USAA guarantees a minimum interest rate.

By paying off debts, creating an estate plan, talking to your heirs, and getting life insurance, you can ensure your family’s financial security. Taking care of these tasks lets you keep protecting your loved ones, even after your death